Orders to U.S. factories declined 1.4 percent in May, the biggest drop since March 2009, after eight straight months of gains, the Commerce Department said.
The department also said inventories decreased 0.4 percent after four consecutive monthly increases, including a gain of 0.6 percent in April. The inventories-to-shipments ratio was 1.25-to-1, up from 1.24 in April.
Unfilled orders, up five consecutive months, increased 0.9 percent in May, a revision from the previously published 0.8 percent increase. This followed an increase of 0.8 percent in April.
Excluding the volatile transportation sector, where large orders for aircraft cause wide fluctuations in numbers, factory orders fell by 0.6 percent in May. In April, orders grew by 1 percent.
Manufacturing has been a rare bright spot in the economy but economists fear high unemployment and reduced demand for exports could cause them to slow in the coming months.
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